Another Company, Another Multimillion Dollar Sale – With Bill Karamouzis

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Interview with Bill Karamouzis, HallPass Media

Watch the full video at:
http://www.domainsherpa.com/bill-karamouzis-hallpassmedia-interview/

Note: Due to problems with the audio portion of the interview, in some areas
of the transcript, words are paraphrased rather than verbatim. We apologize
for the inconvenience.

Michael Cyger: This DomainSherpa show was recorded at the TRAFFIC
conference in October 2011. In lieu of me talking about our three
DomainSherpa sponsors -- who are on the side of this page -- I want to thank
Rick Schwartz and Howard Neu for allowing me to host the fireside chat at
the TRAFFIC conference. I also want to thank Danny Pryor of Rodan Media
Group who put together the video and adjusted the audio levels -- which was
no small feat, but he worked wonders.

It was an honor to contribute to this industry-leading event, and it was my
distinct pleasure to interview keynote speaker Bill Karamouzis, a fantastic
person with a phenomenal story.

I hope to meet you at TRAFFIC in October 2012. Here's your show.

Howard Neu: I'd like to ask our Keynote Speaker to come forward; Bill
Karamouzis. And we have an interesting set up this morning, because Mr.
Karamouzis is going to be interviewed by Mike Cyger, who is a great
interviewer. Go ahead and come on up, and we're going to introduce the
speaker and Mike, who you may know from DomainSherpa; who does great
interviews. And we're going to do a little far sight chat, and then we'll open it
up for question and answers. So, having said that, please welcome our
Keynote Speaker, Bill Karamouzis. Welcome to Bill Kara.

Michael Cyger: Good morning everyone. As Howard introduced me, my
name is Michael Cyger. I am the Publisher of DomainSherpa.com; what I call
the domain name authority, and the place where you can learn directly from
the experts themselves. I'm honored this morning to conduct an interview
with Bill Karamouzis. Thanks, Rick and Howard, for this opportunity.

Bill Karamouzis (HallpassMedia.com) Interview Page 1 of 18
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Bill Karamouzis: Likewise.

Michael: What I like to do on every show of DomainSherpa is start with a big
question. And the big question for this interview is: how do you build two
multi-million dollar businesses in five years with, arguably, marginal domain
names? And then, do it again with the 20/20 hindsight that comes from that
experience? Joining us to answer this question is today's Keynote Speaker,
Bill Karamouzis.

Bill is the Founder of Hallpass Media, which is the now the division of
Mindjolt. If you haven't heard of Mindjolt, it was started by MySpace Co-
founder and former CEO, Chris De Wolfe. Bill is an expert is web site
development; he started three companies, and he successfully sold all three
companies. He's here to share with us how he built an online gaming empire,
and more specifically, how domain names were a critical aspect of his latest
company. Bill, welcome and thanks for keynoting this year's traffic show.

Bill: Thank you. And thanks everyone for coming out. I didn't think I'd make
it after last night, but it's great to be here and over the next forty-five minutes,
I'm going through what I've done with domains with my businesses, the pros
and cons of, you know, mistakes have been made along the way. Some of the
stories are humorous in hindsight. And my last round of development was
one thing that I was proud of as there were other people that were much
better funded than I was. And something that I think a lot of people here do is
convey that message a lot clearer than I do – I'm not a professional public
speaker, I'm just a developer, so I'm hoping I can articulate that message and
if not then questions and answers at the end will allow you to grill me a little
bit.

Michael: Let's start with a little bit of background. For those who haven’t
heard of Hallpass Media, can you describe what you do and the types of
websites you publish?

Bill: Hallpass Media is a collection of online games and websites. We've
taken premium domain names and turned them into really specialized content
hubs. So, some examples are WordGames.com and CookingGames.com.


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They're very focused, and in addition we have more general gaming websites
like Hallpass.com, like CoolGames.com -- it's really a network of 15 sites
now that reaches 6 million global viewers per month.

Michael: Let's start with the day you sold Hallpass Media to Chris De Wolfe.
It was just this past April, 2011. What did it feel like on the day you closed
on the sale, your third business sale?

Bill: That day was fun, it was neat. I got the check from the lawyer…

Michael: You actually got the check, it wasn't direct deposited into your
banking account?

Bill: We're based in Canada and it's harder to get the funds. We got the
check, went to bed, then got up the next day and went straight to work. We
had to change ad tags on 15 sites and all the placements, so literally we went
straight to work.

Michael: Because you didn't want the ad tags from your previous company to
deposit funds into your account so you had to change them all over to
MindJolt tags.

Bill: Exactly. So we literally got the check, deposited it, and worked all
weekend. 'Hey guys, congratulations,' high fives and then worked all
weekend...Friday, Saturday, Sunday, all weekend, almost all nighters
changing out hundreds of tags. And then on Monday when we came in we
celebrated.

Michael: Was there any Champaign going on in the office?

Bill: Not yet. It was exciting, but we had a lot of work to do. It's exciting
when it happens, but right after it happens there are expectations from the
company that just acquired you, and we wanted to send the message that –
now that we're equity holders in MindJolt – we are passionate about what we
do and I think that's what we did.


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Michael: A lot of times when a domainer will have a big sale of a domain
name, they'll go out and buy something…they'll buy a new watch, they'll buy
a new car, maybe they'll buy a house. Did you buy anything new when you
sold Hallpass Media?

Bill: When I sold Hallpass Media, it wasn't that type of celebration because
we had to do work at MindJolt. When I sold AddictingGames.com I went out
and bought some things. I took my family to New York and tried to get my
mom to go on a shopping spree. I kept throwing things in the cart and it
wasn't going very quickly or smoothly, and so by the end I think she got a
couple hundred dollars of clothes. I said, 'mom, come on." But yeah, we did
some travel and things like that.

Michael: We're going to get into the details of the transaction, but when you
sold Hallpass Media, what was the size of the company – that you still run
now – unique visitors, page views…

Bill: We're in the 6 million unique visitors per month range, which includes
our 15 developed websites and our parked portfolio of 35-40 premium
domains that we haven't had a chance to get to like newgames.com.

Michael: So 6 million unique visitors per month.

Bill: Yes. And probably 40 to 50 million page views per month and then
you're looking at about 150 to 200 million banners across the network. We'd
be hitting peaks of about 400,000 uniques per day.

Michael: When you sold the company, what was the revenue of the business?

Bill: Revenue would be covered under NDA, so I wouldn't be able to say an
exact number.

Michael: Those of you that watch the DomainSherpa show know that I don't
let people off with just that questions. Was it above 6 figures?

Bill: It was in the 6 figures range.


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Michael: I suppose if I asked you what the sale price of Hallpass Media was,
you would say…

Bill: NDA. Unfortunately, yes, I'm not in a position to say.

Michael: Let's go back in time now and figure out how you built three
successful companies and successfully exited them. The first company you
started was called FPS Networks, but just prior to that you actually had a 9-
to-5 job.

Bill: I was a website administrator at Health Services, an equivalent of the
state health authority. It was the fourth largest employer in the state, and I
was the website administrator so I did everything from update websites to
building virtual portals for hospitals.

Michael: So people would tell you what to program, you'd put on the website,
you'd make sure the website was up and running.

Bill: Those days, content was very basic. So there wan an initiative maximize
dollars and have very accurate medical content. So I was the IT person in
public affairs and the website was in a limbo phase between it being a public
affairs tool and an IT tool.

Michael: During that time you started a website on your own, after hours,
using published jokes, videos and games. What was that domain, what was
that website?

Bill: Initially it was like GeoCities where people would have all this type of
crazy stuff, but eventually I thought I should grow the domain and see what
happens. So I started this hacker network, and a lot of people at the time
aspired to be hackers, and I put up animations and I put up games – whatever
I could find – jokes, and it just grew. At one point it was reaching 6 million
per month.

Michael: Six million unique visitors per month…you must have been raking
in the cash at that point after hours working at Health Services.


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Bill: Yeah, you'd think. So back then you weren't worried so much about the
money, we were hoping the advertising companies would stick around long
enough to pay you. So my first gut check was that month that we had 6
million, we made $2,000 and by the time the check was supposed to come
around the company had gone bankrupt. It just underlines the fact of how
many scams there were back then, and still today advertising's not where it
should be. That's how it was back then, we were just hoping, 'is this money
actually going to come?' Eventually I did find a way to make money.

Michael: What happened after that website? Clearly, you cut your teeth as a
website administrator, then you built your own website where you had
enormous traffic. What came after that?

Bill: Each year you would get better advertisers. We started working with a
company in New York and they started getting advertising for us. We were
growing traffic, but they had a hard time selling ads on our site because the
site was called Hacker Network, and it had nothing to do with hackers but the
stigma repulsed advertisers. Most people coming to the site would see flash
animations and flash games, so they said why don't you name it something
that makes a little more sense? So I went shopping for domains. I initially had
flashcollector(.com), and I looked around and saw that flashplayer.com was
going to drop, so I put in an order with SnapNames.com, I think, and it
dropped and I paid $69 or $80 for it and I couldn't believe that I got it.
Macromedia didn't own it.

Michael: The Flash player from Macromedia was actually out at that time,
and they didn't own flashplayer.com?

Bill: Yeah, it was out and popular at the time. That was the time we were
getting splash pages made of flash, where things would fly out at you. Flash
was still pretty basic, but the potential was there and it was being used for
animations and games and splash pages.

Michael: So you were amazed, you bought it for $60 or $80 off the drop and
what happened?


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Bill: I thought I could retire given that I had hit the jackpot. So I went to
sleep thinking I'd wake up in the morning having 300,000 people visiting per
day and the next morning I checked the stats and it was 100. I figured I'd
have to stick with it for a while.

I looked at Macromedia's website, and it listed a bunch of trademarks. Flash
was trademarked, and variations of flash, and flash player wasn't listed so I
took a screenshot of it and I thought 'I can't not use this domain.' In hindsight
building a business on a domain name like that was absolutely incredible.

Michael: So you took all of the games and animations you had on the original
hacker network website and put them on flashplayer.com. It was a more
credible website and now UGO was able to sell more advertising for you.

Bill: Exactly. It was a much better domain name to remember. And the 300
people per day that visited didn't have flash installed on their browser, so they
couldn't view our content so we had to give them information to install a
flash player.

Michael: How successful was flashplayer.com? How big were you able to
build it?

Bill: Flashplayer.com had animations and games on the website and at the
time we were monetizing through banners sold to advertisers, and with
bandwidth so expensive we had to surround our games with ads. Most of our
viewers were visiting from work or school, and we made less money because
we didn't have adult-related ads but people could view our games from
school or work without being blocked. So we were making a lot less, but we
focused on user experience and grow over the long term eventually making
more money.

Michael: So while your competitors were able to get more revenue per
visitor, you decided you were going to go for more visitors and make less
revenue (in the short term).

Bill: Yes.


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Michael: What did it feel like building your business off of a trademarked
domain? Flash was a technology owned by Macromedia, you were using a
domain with that word. Did you lose sleep at night knowing your making
money and have millions of website visitors – and you may lose your domain
at some point?

Bill: Probably at the beginning when I first launched it. But as time went by, I
became more confident. We had hundreds of developers and content, and
eventually I started to think that I had a lot of pull – whether that was true or
not – I felt that Macromedia needed us and these developers. After two years
of not being contacted, I thought – whether it was right or wrong – it ended
up being alright.

Michael: So Flashplayer.com was successful, you had UGO selling
advertising for you, you had a great domain name that was getting some
targeted type-in traffic…what was your next step in the evolution of the
company?

Bill: The next step was really hiring the right people. It seems like every time
we would have a big traffic spike we would crash. It was just the Internet
back then; get highlighted on Slashdot.com and we would crash. So I hired
my first employee which was a high school friend of mine and he became our
lead programmer. He rebuilt it from scratch and our goal was that it had to
scale – our servers, our coding has to be really lean. So that was really the
first step from what I did to building a company.

Michael: So then you built a platform and flashplayer.com became more
successful because it stayed up and running through spikes and was able to
serve more customers. Did you look to expand the business by buying more
domains at that time?

Bill: Yes, I did. I looked at developed websites because I didn't understand
the power of domains at the time…it just didn't register with me. I looked at
the competitive landscape and there was this really great website called
addictinggames.com, but they were more a directory sending traffic to other
websites. So I thought if we took this website and put our platform behind it,
we could own the traffic. I reached out to the owners. He was making


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$20,000 to $30,000 a month (in revenue), which was a lot of money, and he
didn't want to sell, so it took nine months of going back and forth – do you
want to sell, do you want to sell – and finally he found something he wanted
to buy and needed money. He emailed me and said bring X dollars to my
house and finally you can buy this, and I was able to get enough money
together including tax money that I was supposed to pay, so I took all that
money and flew to Vancouver with that money order and flew to Vancouver
to do the transaction. Then I had to fly back the same day because I didn't
have enough money to stay over in a hotel. We came back and started to
develop it out.

Michael: Wow. So you flew there, you put all the money down on the table,
you went all in, you had $1,300 left, you flew home with a wallet a lot
lighter, you had addictinggames.com which was making $20,000 to $30,000
per month, and your thinking was I can grow this to make more revenue.
What were you able to build that into?

Bill: 30 days of non-stop development. Right away I hired my second
employee. And I hired a contractor to help. We started developing. We
reviewed screen shots of something like 4,000 games. And 30 days later we
put out a site. On other websites you never knew when they would publish
new games, but we published a schedule of when new games would come out
– you'd go there and be disappointed, so we published a schedule so people
could expect them. We would put out new games on Thursday night and then
would see a spike on Friday, so we built that pattern. So we did things like
that. We'd also optimize the graphics of every single game. If an image were
10KB we'd take it down to 5KB to cut our bandwidth in half. You'd visit
other websites that had large graphics and it would take a while to download
and it was graphically intense, and I didn't think that was a good customer
experience.

Michael: Thirty days from the day your purchased to the day you relaunched.
Were you able to use some of coding from flashplayer.com?

Bill: The engines were slightly different. Flashplayer.com had a lot of
interaction on it, but we needed this to scale. So we bought 64 servers to run
addictinggames.com.


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Michael: So you took addictinggames.com at $20,000 to $30,000 per month,
you redesigned it, built with a new platform optimized to deliver fast-
downloading games, what was your revenue the first 30 days?

Bill: After development it really spiked. It spiked to between $200,000 to
$300,000 per month.

Michael: Wow, so you took it from $20,000 to $30,000 per month to
$200,000 to $300,000 per month in 30 days.

Bill: Yeah.

Michael: You grew addictinggames.com and flashplayer.com – those were
your two main business lines, is that correct?

Bill: Yes.

Michael: You sold ads on there. People would come to play games and see
ads above, ads to the right, ads below the games?

Bill: Our ad strategy was a little different. We weren't as aggressive as other
sites. Our focus was more on the user experience. It didn't produce the most
revenue, but we really wanted to grow and get scale so we put two banners
per page. We were really light [on ads displayed] but we were focused on
high quality advertisers. So while we may have had less ads per page, we had
more pages and then UGO would go sell against that volume and it was all
driven by the user experience.

Michael: You focused on the user experience, it was fast loading, it was no
adult content, and you had outside companies representing you and selling
the ad space and they were interested in doing that because you had all that
volume. What does an outside [sales] agency typically look for? Unique
visitors, page views, impressions?

Bill: I think it's a combination. They want to know the demographics of the
advertising base, so 18-35 year old males is what UGO wanted. We fit that


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profile. Once you get a certain volume, 100,000 uniques per month, and
10,000 a day, we had virtually every ad company wanting to work with us.
Every week an email would come in from an ad network wanting to work
with us, but at the time in 2004 it was a bit shady and you never knew who
was behind the ad network. It was difficult to find good advertising networks
at the time.

Michael: When you say people were contacting you out of the blue, how
would they even know about your company? Clearly having 100,000 uniques
per month and 6 million per year is a lot, but how would the buyers know to
look for properties like yours and contact you?

Bill: I think ComScore was a big indicator of top properties, and then it ties
to competitors. I would go a couple of days and then get calls from buyers,
and it was pretty fun. I think that's how they'd get their information.

Michael: You were monetizing content on your websites. Your content was
the games, and you couldn't develop all the games yourself otherwise you'd
need a whole army of employees. What was your strategy for getting all that
content – all those games?

Bill: Web 2.0 was huge for content and user generated content, so that's what
we were doing. We were providing a platform for the content and a site
where developers could distribute their content and get it out in front of
people. Sometimes we would do deals and pay the developers. Paypal wasn't
big yet and the systems to pay people was difficult outside of the country,
even in the country.

Michael: So the game developers knew about your platform and the reach,
and a lot of game developers came to you and said we want to publish our
games on your network for free and you have the rights to use it?

Bill: Yes. We did some combinations too, where there was some pay. But the
games that really did well came from guys that just made them and provided
them for free. But they didn't know about how to build a game so it loaded
quickly, if we launched it and had a spike of traffic they didn't realize that
their game wouldn't load quickly. So we would help with that.


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Michael: A majority of the content was user generated content submitted for
free? How did it break out: content you paid for versus user submitted free
content as a percentage of all content on the site?

Bill: It was probably 90% free content. Over the years it's gone down, and
now we're probably about 40% free submitted content.

Michael: When you develop content are you developing it with an advertiser
in mind, or because you know what's getting high traffic on the site?

Bill: On the site, we build content based on the demographic profile of the
audience we want. But on a game by game basis, it's a lot of user generated
content. We just make sure the games are quick, user interactive, fun, and a
other qualities that will make the demographics that we want come back to
the site.

Michael: In the pre-interview you told me about a great advertising campaign
that you had, where an advertiser stuck out more than usual. Can you walk us
through the Xbox campaign or another one that you built?

Bill: One that was really crazy was Discovery Channel. They have this
program called Shark Week that guys love. So they made a flash animation
that looked like a shark flew out of your screen, and people actually like it.
So when you have an ad that people actually like, they're going to watch the
show, and tell their friends. So ads like that really displayed how well it can
work and if all of my advertising was targeted like that, it would be great.

Michael: You mentioned you weren't paying game developers at the
beginning, but you're paying them now. What does a game developer
typically make per paid game?

Bill: It's changed, but for now we're paying our top developers $300,000 per
game…most are probably $5,000 or $6,000…is a good amount. A lot of
developers have made over $100,000 developing games and they've got
interviews and job offers as a result of their games.


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Michael: So $5,000 and you get a game whereas Sega or Wii spend millions
of dollars developing, manufacturing, packaging, getting out to the suppliers
to get people to buy it.

Bill: I think that's why we're more focused now on social games. The costs
and risk are a lot lower, so you can risk a lot more on game developers. You
can have more misses.

Michael: Let's say you get a game for free. You get it in-house and it looks
like a great game. How do you quality assurance check the, say, 30 levels?
Do you play two levels and then assume the entire game is a quality game?

Bill: The first few years, I was editor of the site so I would check the games.
It was a long process and I'd try to get to every level. I would check the game,
take the screenshots, and play them as far as I could. I'd do the best I could
and take the game live, and then get a bunch of emails from users saying that
on level 30 a giant penis would come out and start eating the character. You
don't know why, so I'd email the programmer and say you realize your game
has millions of people playing … why does a penis come out on level 30 and
eat people? And they'd respond, oh I didn't realize that it was going to be
used by people, let me send you something that's not so crazy. So, it happens.

Michael: You mentioned a schedule earlier. You'd get games everyday from
developers who want to be highlighted. What's your process for taking them
live? How long would it take you to get a game and have it go live on your
website?

Bill: It could take up to 60 days. Eventually we started getting so many
submissions that we couldn't keep up with them. So we'd have a queue and if
we found a great game we might move it up the queue.

Michael: Every time you'd publish a game, you'd notice a spike in traffic and
it would come down, but the overall trend was constantly growing?

Bill: Absolutely. It was constant growth, and we'd take breaks in content and
the users would get upset. So we never took time off, we needed to have fresh
content up all the time. Once we set the Friday publishing schedule, it was


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like the holy grail. You have to have new content up. Doesn't matter if you're
sick. I would think that we never missed, maybe we missed 3 in 8 years. It
was a really important part.

Michael: Most people would think that an online gaming company is so easy.
You just put up games and people come. So opposite the newspaper world
where you have your deadlines, stories, pages built, on driveways in the
morning, but there are a lot of similarities between the two businesses.

Bill: Absolutely. If you want to be taken seriously, there are things you have
to do. You have to watch your competitors, meet the schedules, hire the
editors, etc. Only in viewing a game can you determine if the game is going
to be great or not.

Michael: So with flashplayer.com and addictinggames.com, people were
taking notice. They'd see you on ComScore as one of the top 1,000 websites
in the world, and they started contacting you for advertising, for partnerships,
for investment, and suddenly an offer came in. How did that happen?

Bill: We received a lot of offers that we never took seriously. Some of the
VC offers that came in seemed sleazy. And eventually, I received an email
from ____ who was the CEO of Shockwave. It was really short. He wanted to
get together and talk about the sites. I didn't view them as a competitor, but at
the same time they were an investor in Macromedia. And I thought, the day
has arrived. But it was just a conversation so I flew to New York and we had
breakfast and talked about what's been done.

Michael: So they were actually representing a competitor. How did that
transpire?

Bill: Shockwave was really popular. UGO had a first right of refusal on
flashplayer.com. We went down to San Francisco, and spoke to the CEO, and
we talked about finding a mutually beneficial win-win scenario. And I was
expecting nothing to happen. I was expecting this to get ugly, but it never
came to that. There was no legal issue.


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Michael: So Atom Entertainment ended up buying addictinggames.com,
UGO ended up buying flashplayer.com, you ended up with cash in your
pocket and a contract to continue working with both of those companies for a
number of years?

Bill: Yes, exactly that. I was restricted to working on only one of my domains
at the time on the side. I also became one of the largest shareholders of Atom
Entertainment.

Michael: I interviewed Rick Schwartz on the show and he told me during his
DomainSherpa interview that he likes to take a small portion of his cash sale
as stock or options so if there's a big sale down the road he gets a portion of
that upside. You did the same thing with Atom Entertainment, becoming one
of the largest shareholders of Atom. What happened to the shares of Atom
and UGO that you owned?

Bill: It was a weird situation because the sites kept growing but the shares
were the same. They were in business for seven years, and who is to say
whether they ever get an exit. I was a significant shareholder in Atom
Entertainment and a smaller shareholder in UGO. It worked out favorably
that after my seven year journey, six months later MindJolt comes along and
snaps up Atom Entertainment. So all of the problems and legalese that they
put in my contract just triggered with the sale. 18 months later UGO
entertainment was bought by ___.

Michael: And you had a clause in your contract that said that if there was an
acquisition, my shares get triggered and I get paid out?

Bill: Part of my security was structuring that deal so not all the risk was at the
end. Addictinggames.com grew to the largest games website in the world, so
it worked out well.

Michael: You built two wildly successful gaming businesses, you
successfully exited both those businesses, you got a contract to work with
Atom and UGO, and you maintained and started building Hallpass.com.
What did you want to do differently with Hallpass.com, knowing what you
learned from your prior years' experiences?


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Bill: In my eight hour workday, I had two hours to spend on Shockwave
stuff, two hours on flashplayer stuff, and four hours on ___, so I actually did
a lot of work. Obviously flashplayer.com was a great domain name, look at
addictinggames.com it was horrible – it was hard to spell, there were tons of
typos of it, that wasn't the way I wanted to go. I had to find a really
competitive advantage that was sustainable. If users were 10 cents, they were
going up, and VC wanted scale. The competition had changed. If domains
had type in traffic, I wasn't sure if people were actually typing in domains
any longer. I started reading all the blogs, like 80% of the bloggers here, I
couldn't believe I was reading and I thought it was an opportunity. I looked at
Hallpass and looked at page views, time on site, things like that. I knew
people wanted to play more games. The information was there. People that
played word games didn't play other games. Before I was optimizing by ___,
so in order to test my theory I bought some domains and put out targeted
sites. And our stats showed that people played more games, and our bounce
rate dropped from 50% to 20%. That means that 50% of the people that used
to come to our site would leave after viewing one page and then go to other
sites. Now, 80% continued onto another page and it's enormous the revenue
you can get from keeping people on your website. Once that idea was proven
successful, I took $2 million and bought other domain names. And I decided
that was going to be the direction that the company was going to go in…these
sites that have natural type-in traffic we're going to use, and put premium
content on them, and watch our stats increase. Our page views per visit went
from 5 pages per user to [inaudible] and time on site when from 5 minutes to
over 10 minutes. So we went from users only making use of 30% of the
website, to using 100%. And advertisers loved it because people were staying
on the site longer. From an SEO perspective, if you look at any one of our
names, they're all on page one of Google for a particular phrase. So the
domain strategy, content strategy and SEO strategy are all wrapped into one.
The domains were all there for the picking; I just went through and contacted
as many owners as I could that would sell them to me for a price that I
thought I could monetize them for.

Michael: CookingGames.com was one of the biggest news stories of 2009.
Ron Jackson mentioned it in his news stories, after double and triple checking
it. He couldn't believe that someone would pay that much for the domain


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name. You bought CookingGames.com for $350,000 in 2009 from Nokta
Domains in Turkey. Why was CookingGames.com worth so much?

Bill: The content of cooking games was one of our most popular titles. I was
a little hesitant about the domain name, and I started talking to them and they
told me it was making $40,000 per year parked. So I did the math and it was
making more than bank interest, it's making more than other investments. It
took me a long time to decide but it's a high search volume but it had a top of
content that our users wanted. So we negotiated and I bought it. After that
information came out, all the other domainers jacked up their prices and so I
knew it was time to develop the domains I had. We put up a site and I think
it's a beautiful looking site and the growth has been phenomenal.

Michael: We're going to open up for questions and I think Howard is going to
moderate that. While you're thinking of questions, I want to finish up with a
question about premium domain names. The critical part of Hallpass games
and part that led to your success had to do with how much money you were
spending to promote flashgames.com and addictinggames.com and today
your competitors how much they spend on advertising, but with your
premium domains you get enormous search volume -- and if you're not sure
about the search volume, go type "cooking games" and do an exact match
search on the Google Adwords Keyword Tool – 600,000 just in the US, over
a million worldwide. How was having the exact match domain helped your
business and saved on advertising,.

Bill: That's the core value with premium domains. We're getting 25,000 type-
ins per day and that would cost us a minimum $0.10 per user, so our
advertising budget saved is essentially $2,500 per day. So we can take that
money and spend it on content. In a recession, that's the greatest thing we can
have because the first thing people cut is their advertising budget. Our
competitors have "turtled up" and are waiting for this recession to end, where
our advertising was built into the value of the asset and that doesn't change.
That's why the domains are so valuable, because the value doesn't change. So
if we're saving $1 million dollars a year by not having to buy users, the cost
of $350,000 for the domain doesn't seem like that much. You, instead, put
that money on content, on engineers and on infrastructure, and all of the
sudden you're competing with companies that are spending $1 million a year,


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that are well funded, but if you have solid fundamentals in business – it will
come back to you. That's where solid domains come in. That was my learning
in domains. Our growth hasn't changed, we've been a steady straight line
when our competitors have had to struggle at times.

Michael: We're out of time, I apologize. Bill, you're around for the next
couple of days so please ask him your question directly.

Howard: Before I let these two guys go, I just wanted you to know that when
I saw CookingGames.com up there, I put CookingGames.com in my iPhone
and I saw it was mini café in. If you like games, and I'm a big gamer, now
you can get mini café. First of all I want to thank Mike Cyger, please give
Mike Cyger a round of applause for being a great interviewer. And, Bill
Kara, he gave us some great information and I congratulate you on your
success and I know that you're here to share that with everybody. I apologize
for the lack of sound quality, but we're working on that and we'll have that
better as we go along. Thank you all for staying and listening, and thank you
Bill Kara, big round of applause.

Watch the full video at:
http://www.domainsherpa.com/bill-karamouzis-hallpassmedia-interview/


Another Company, Another Multimillion Dollar Sale – With Bill Karamouzis

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